We report on the results obtained from an analysis of IUE
high and low resolution 1200-3200 Å\ spectroscopy and
FOS 1300-1600 Å\ spectropolarimetry of the eclipsing
interacting binary V356 Sgr. This binary system consists
of an early B star that exhibits a B2II spectrum accreting
matter from a Roche-lobe filling A2II star. The orbital
period is 8.896 days. Ultraviolet spectroscopic observations
with IUE, spanning 15 years, have shown that the system
displays strong, broad emission lines, including N V and
Si IV, during the total eclipse (C IV is not seen because
the circumstellar matter is composed of CNO processed
material) but a relatively normal B-type spectrum, without
emission lines, outside of eclipse. The FOS observations
were obtained in outside of eclipse in October 1993. The
new analysis of the IUE and HST data argue that the B2II
spectrum is not a photospheric spectrum but, rather, arises
in a compact, optically thick ``disk'' with substantial
vertical extent. This ``disk'' is also asymmetrically
distributed around the accreting star. The behavior of the
emission lines through total eclipse imply that these
emissions arise in a region well removed from the immediate
vicinity of the two stars, and are associated with a bipolar
flow of matter from the accreting source. A scattered light
continuum, consistent with the FOS spectropolarimetry results,
is also seen in the IUE data. This continuum exhibits some
occultation during total eclipse and must originate closer
to the stellar components than the emission lines. A model
is presented for the origin and structure of the
circumstellar matter in this binary.